The PHPEclipse zip files must be extracted in the same directory in which you installed Eclipse. It contains two directories, plugins and features, and these must add to the plugins and features in your existing eclipse directory.

Note: Eclipse 3.x caches all plugin.xml files into a single repository for quicker loading. If you used eclipse before installing PHPeclipse, you should start eclipse once with the -clean option. This -clean forces Eclipse to rebuild that repository. This applies to anything that is installed into eclipse by unzipping it into its plugins folder.
This plugin can be replaced by a similar plugin the Php Developer Tools (PDT), more here http://wiki.eclipse.org/PDT/Installation